Texas-based Dealer Charged 40% Markup to Californians Who Purchased Carbon Credits
SACRAMENTO – The Department of Financial Protection & Innovation (DFPI) has reached an agreement with Texas-based Restitution Brands LLC stemming from the sale of carbon credits to California consumers who were not informed that the company took a significant portion of their carbon credit purchase in hidden markups.
Operating as Terrapass, the company has agreed to refund over $68,500 to nine California businesses and 621 California consumers. The company has also agreed to revise their policies and procedures to disclose fees and markups associated with any future sale of carbon credits.
It is the first time DFPI has taken action against a carbon credit seller for its failure to disclose fees.
“Transparency and disclosure are essential in California’s carbon credit market,” said DFPI Commissioner KC Mohseni. “Today’s settlement reinforces our commitment to consumer protection and to filling regulatory gaps in emerging financial and environmental markets.”
DFPI’s investigation found that Terrapass, a participant in the voluntary carbon market, sold carbon credits to California retail consumers and businesses while failing to disclose average markups of over 40% of the original purchase price. For example, the investigation found that only $300 of a consumer’s $500 purchase of carbon credits funded underlying environmental projects. The remaining $200 was allocated to pay Terrapass’ operating expenses and bolster profits.
California’s state commodity statute of 1990 prohibits omissions and misrepresentations in connection with the offer and sale of commodities, including carbon credits.
Consumers who feel they have been the victim of unlawful, unfair, deceptive, or abusive practices by a financial service provider may submit a complaint with the DFPI, either online (dfpi.ca.gov/submit-a-complaint) or by calling (866) 275-2677.
About DFPI
The Department of Financial Protection and Innovation protects consumers, regulates financial services, and fosters responsible innovation. DFPI protects consumers by establishing and enforcing financial regulations that promote transparency and accountability. We empower all Californians to access a fair and equitable financial marketplace through education and preventing potential risks, fraud, and abuse. Learn more at dfpi.ca.gov.
